South Korea Aims to Power the Won with Stablecoins
By trying to make stablecoins that are based on the South Korean won legal, South Korea is making a big step into digital finance. With the help of President Lee Jae Myung, the plan aims to make South Korea less dependent on foreign currencies, especially the US dollar, and make it a digital finance leader in Asia. The proposal says that private companies could be allowed to issue won stablecoins as long as they are completely open about their currency reserves. Government officials say the goal is clear: to increase economic sovereignty and make cross-border trade easier by using domestic digital tokens.
Lawmaker Min Byeongdeok, who used to be President Lee’s digital asset chief, is in charge of the task. Min recently put forward a bill that would require stablecoin issuers to get a license and be open about their reserves.
Min said, “The use of dollar stablecoins is directly linked to the outflows of capital.” He thinks that by promoting alternatives linked to the won, the country can lower those outflows and lower the costs of doing business and trade.
Twitter user bonghyeon said, โStablecoins match the demand for government bonds in that currency โฆ No one is buying Korean won bonds.โ
Digital money that can be used in the real world
A stablecoin backed by a won could be useful in many areas, including e-commerce, gaming, and digital content. A well-known finance writer on X said, “Stablecoins match the demand for government bonds in that currency … There are no buyers for Korean won bonds.
KakaoPay is already showing interest by applying for patents for the use of stablecoins. Analysts say that if a won stablecoin were to be released, it would make sending money for travel and tourism easier and cheaper because the fees would be lower than those of currency exchange or wire services.
Finding a balance between innovation and resistance to regulation
Skeptics are still careful, even though people are excited. Brian Hoonjong Paik co co-founder of SmashFi, warned that won stablecoins will not transform the won into a major global currency overnight. He also said he was worried about foreign traders using the money for speculative purposes and the possible weakening of financial protections. Paik said that instead of making won stablecoins, the government should think about making a clear bitcoin reserve.
There are also concerns over state overreach. Some people are worried that stablecoins could turn into state money that is watched. However, Min noted that the proposal differentiates stablecoins from a central bank digital currency.
โThis is not about surveillance,โ Min stressed. โIt is about trust and global standards.โ He also highlighted the goal of maintaining decentralization and self-custody while ensuring investor protection.
After the 2022 Terra collapse stalled local crypto momentum, South Koreaโs Digital Asset Basic Act now aims to legalize ETF investment in crypto and establish a presidential advisory panel. With renewed regulatory clarity, the nation is seeking a comeback, with won stablecoins as a central pillar supporting safer innovation and national sovereignty.
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